Accenture Report Shows Lessons Learned in Water Management from U.S. Shale Gas Operations

Countries and operators that are embarking on the global development of
shale gas resources can benefit from the United States’ experience in
water management from shale gas operations, according to a new report
from Accenture (NYSE: ACN).

The research looks at how countries with proven reserves, such as
Argentina, China, Poland and South Africa, can leverage U.S. lessons and
trends in water regulation, water use and management, and water
movements to develop shale gas reserves economically and sustainably.

The report also identifies implications of shale gas development for oil
and gas companies and highlights areas in which these operators should
aim to build their capabilities to succeed in the current operating
landscape.

“Successful oil and gas operators will be those that understand the
local water challenges, leverage the learnings from the U.S. plays and
develop the right water sourcing, use/reuse, treatment, disposal and
supply chain strategy,” said Melissa Stark, managing director and Clean
Energy lead for Accenture's energy industry group. “One key opportunity
for new geographies where infrastructure is a challenge is to explore
sharing the development of infrastructure, water treatment facilities
and the development of the local supply market.”

The report emphasizes that countries will have different issues, options
and solutions to the water challenges depending on the geology of the
shale and the particular regional characteristics.

For example, the report compares the water sourcing challenges in South
Africa’s Karoo basin with Poland, and shows how different the flowback
volumes and total dissolved solids (TDS) levels are across U.S. plays.
Flowback is the injected fracture fluid mixed with the formation water
containing dissolved minerals from the formation that flows back to the
surface after fracking. Flowback water contains clays, chemical
additives, dissolved metal ions and TDS.

The report also emphasizes that in this constantly evolving landscape,
water management options can change and that proactive engagement with
operators in developing regulation will help the implementation of
effective solutions and reduce the cost of compliance.

One area that provides immediate opportunities for some operators is
logistics, according to the report. Implementing a logistics operating
model that addresses the water movement challenges will improve
congestion, efficiency and reporting of water movements. In some new
markets, there are opportunities to design “for the basin” and even to
share excess capacity and infrastructure, such as water treatment
facilities.

The report points out that there will be increased focus on reducing the
water intensity of production processes, and operators can achieve this
by delivering efficiencies in operations, and by maximizing
opportunities for end-to-end reuse of wastewater and water treatment. As
the report notes, there are opportunities to work with treatment
suppliers to gain leverage from new water treatment technologies.

Operators will also need to carefully assess the increased requirements
for data on the flows of all materials throughout the life cycle of
shale gas operations. Capturing, storing and reporting this data will
require a new level of data management for operators – as well as
regulators -- to effectively use the data to support environmental
impact assessments.

About Accenture

Accenture is a global management consulting, technology services and
outsourcing company, with 257,000 people serving clients in more than
120 countries. Combining unparalleled experience, comprehensive
capabilities across all industries and business functions, and extensive
research on the world’s most successful companies, Accenture
collaborates with clients to help them become high-performance
businesses and governments. The company generated net revenues of
US$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page
is www.accenture.com.